This is the official Beta 1 build, in this build the name Windows Vista is first mentioned as the build string on the desktop on top of a new grassy wallpaper.

Windows Setup has been completly overhauled, it is now dark blue background and a lighter blue Windows Logo but the bootscreen remains unchanged.
There are several changes since the pre-beta build, the theme is still called Aero, but several enhancements to the startmenu and taskbar have been made such as the Beta 1 are more darker and uses black color's, while Pre-Beta's one used lighter gray.
It also includes the Security Pop-up seen in the Pre-Beta and Windows XP Service Pack 2.
On the first boot you also see a program running that is called the Supplemental Driver Pack Installation Wizard which can't be used.
There are several new icons on the desktop, a readme, a link to the Supplemental Driver Pack and how to file a bug report, the Recycle bin is bigger and has turned, it is now facing left, instead of right which remains unchanged even in later Windows versions.

The Control Panel has changed once more, now showing groups with a none, 1 or 2 basic tasks below it.
It includes some updated icons for some applications, but also includes some new ones, like Auxiliary Display, Indexing and Search Options, Solutions to Problems and Windows Parental Controls (which was in the pre-reset builds, but now reintroduced).
In the 32-bit version there are 2 Portable Devices folders, one named as Portable Media Devices.
In the 64-bit version there is an extra folder for View x86 Control Panel Icons.
The Solutions to Problems is a new application which checks for solutions online for problems you're computer faces, in later Windows Versions it is still present.

In the Explorer you find Virtual Folders, the explorer windows itself have different colors, blue, green, orange, red.
It includes Documents, Pictures, Music and a Games folder.

The included Applications are updated, such as Media Player then to 3717, Internet Explorer to 7 Beta.
Outlook Express is still at version 6, but now includes 3 sample e-mails, included a e-mail about a feature only found in Vista Beta's Outlook, not in earlier versions.
Windows Messenger remains absent, but included Movie Maker 2.1, which can't run without the Audio Hardware.
Other applications included are the Windows Backup Beta, called SafeDocs when running, also present is an Program Compatibility Wizard which helps you install older applications with the correct settings which was also present in the pre-beta.

It also includes the UAP Settings, which is by default disabled, you know it as User Account Control in later versions of Windows.
It display's an message to continue of you want to do an administrative task.

As said before, the default theme is still Aero with some enhancements.
Unlike the Pre-Beta, it does not include Windows XP's Luna anymore, only Windows Classic.

Installation
When you selecting your installation destination you get a message that the partition is not ready for installation.
Partition and Format the drive using Setup via New and Format then reboot the machine and it will now continue to install.